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The highest-ranking members of the Senate banking committee said President Barack Obama should name a permanent regulator to oversee mortgage companies Fannie Mae and Freddie Mac. Committee Chairman Christopher Dodd, D-Conn., and Sen. Richard Shelby, R-Ala., made the recommendation in a letter to Obama. Civil servant Edward DeMarco has been acting director of the Federal Housing Finance Agency since September.

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Financial-regulatory reform won't be complete until Congress does something about the misguided housing policy that helped drive the crisis, writes former Treasury Secretary Henry Paulson. To do this, the government must eliminate investment portfolios at Fannie Mae and Freddie Mac and reduce subsidies that excessively favor homeownership over other investments, he argues.

The Basel III proposal of banks' capital and liquidity rules was relaxed a bit, compared with a previous draft, but it was not changed as much as some observers suggested, said Comptroller of the Currency John Dugan. He said the definition of "quality capital" is tougher than one used to stress-test banks in the country. "I think it's been a little misreported how much they scaled things back," Dugan said.

Citigroup agreed to pay $75 million to settle a charge from the Securities and Exchange Commission, which accused the bank of failing to disclose to investors $40 billion in risky mortgage assets. Losses on the mortgage securities took Citi to the verge of collapse.

Clearinghouse LCH.Clearnet might implement a membership category for sovereign users of derivatives, including central banks, that want to work with central counterparties. The creation would give sovereigns CCP access without requirements imposed on regular members, including the posting of initial margin.

The law to overhaul financial regulation leaves the fate of mortgage giants Fannie Mae and Freddie Mac undecided and does not simplify the complicated system that governs securities and banking, the International Monetary Fund said. How the law is implemented will determine whether it accomplishes its objectives, the IMF said.